Small Businesses Collapsing Under Economic Pressure, ASBON Raises The Alarm

No Result View All Result Home News Politics Business Sport Football Health Entertainment Education Opinion Editorial Columns Others LeVogue Magazine Conferences National Economy Contact Us Hausa Edition Home News Politics Business Sport Football Health Entertainment Education Opinion Editorial Columns Others LeVogue Magazine Conferences National Economy Contact Us No Result View All Result No Result View All Result Small Businesses Collapsing Under Economic Pressure, ASBON Raises The Alarm by Okoh Blessing 17 minutes ago in Business Share on WhatsAppShare on FacebookShare on XTelegram The Association of Small Business Owners of Nigeria (ASBON) has raised the alarm over the growing collapse of small businesses across the country, warning that mounting operating costs, rising debt obligations and multiple taxes and levies imposed by state and local governments are pushing entrepreneurs out of business.

The association warned that the crisis poses a significant threat to Nigeria’s economy, particularly to job creation, as small businesses remain a major source of employment and livelihoods for millions of Nigerians.

ASBON National President, Dr Femi Egbesola, who spoke in a media chat with LEADERSHIP, described the situation as a humanitarian crisis, noting that many business owners could no longer withstand the harsh economic environment.

According to him, the combination of escalating operating expenses, difficulties in repaying loans and overlapping government levies has left many entrepreneurs struggling to keep their businesses afloat, with some forced to shut down their shops.

“Many businesses simply cannot cope with the harsh economic environment. Owners are closing their shops, unable to meet loan obligations or manage skyrocketing operational costs. Several people have died under the pressure; others are in the hospital. It’s a humanitarian crisis,” Egbesola said.

The ASBON president expressed concern that the deteriorating conditions facing small business owners could have far-reaching consequences for household incomes, job security and economic activities, particularly among low-income earners who depend on small enterprises for their livelihoods.

He also criticised state and local government authorities for imposing multiple and overlapping levies on businesses, arguing that such charges further increase the financial burden on entrepreneurs already battling high operating costs.

The development comes amid longstanding concerns over the survival of micro, small and medium enterprises (MSMEs) in Nigeria, where access to affordable financing and the cost of doing business have remained major challenges.

Although Nigeria lacks a recent definitive national census establishing the current number of active enterprises, historical data from the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) indicate a decline in the country’s MSME population.

SMEDAN’s data showed that the number of MSMEs fell from 41 million in 2017 to 39 million in 2021, with the decline attributed to economic difficulties and severe financing constraints.

The figures provide a historical indication of the pressures confronting the sector, although they do not establish the current number of business closures nationwide.

The latest concerns raised by ASBON underscore the need to address the cost of doing business, improve access to affordable credit and review the multiplicity of taxes and levies imposed on small enterprises.

With small businesses playing a critical role in employment and income generation, sustained closures could weaken economic activity, threaten existing jobs and limit opportunities for new entrants into the labour market.

Egbesola’s warning adds to growing concerns about the vulnerability of small business owners to economic shocks and the need for coordinated policies to improve their operating environment and support their survival.

Also speaking to LEADERSHIP, the President of the Lagos Chamber of Commerce and Industry (LCCI), Engr. Leye Kupoluyi, warned that the cost of doing business remained excessively high, particularly for MSMEs and manufacturers.

He identified electricity and alternative energy, diesel, logistics, financing, imported raw materials, machinery, regulatory compliance and multiple taxes as major constraints on business competitiveness.

Although the LCCI President said the recent reduction in the Monetary Policy Rate by the Central Bank of Nigeria (CBN) offered some relief, he cautioned that the adjustment would take time to translate into lower lending rates for MSMEs and local manufacturers.

The CBN reduced the Monetary Policy Rate to 23 per cent at its September 21–22, 2026 meeting from 26.5 per cent previously. However, the benchmark rate remains elevated, keeping borrowing costs a major concern for businesses seeking working capital to purchase inventory, pay suppliers and sustain daily operations.

The financing challenge is particularly acute for smaller enterprises, many of which struggle to meet commercial banks’ lending requirements or provide acceptable collateral.

The Chairman of the Alliance for Economic Research and Ethics (AERE), Hon. Dele Kelvin Oye, said Nigeria faced a credit deficit exceeding N130 trillion, arguing that the shortfall was constraining the growth of about 39 million MSMEs.

According to Oye, limited access to formal credit forces many small businesses to rely on informal financing or expensive short-term loans, undermining their ability to expand, invest in equipment, employ more workers and withstand economic shocks.

The funding gap also limits the capacity of businesses to respond to rising operating expenses. Without affordable credit, many enterprises are left with fewer options when the cost of raw materials, transportation, rent and electricity increases.

Energy costs have compounded the problem, particularly for businesses that depend on generators because of unreliable public electricity supply.

Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, has repeatedly warned that high energy costs, elevated interest rates and weak consumer purchasing power are combining to erode business margins.

“The real economy remains under considerable pressure despite improvements in the macroeconomic environment. Businesses continue to grapple with elevated production costs, high interest rates, inadequate electricity supply, logistics bottlenecks and weak transport infrastructure, all of which continue to undermine productivity and competitiveness,” Yusuf said.

“Energy, logistics and raw material costs are elevated, while weak consumer demand limits pricing flexibility… The result is a tightening squeeze on margins, declining profitability and rising business vulnerability, particularly in consumer-facing sectors,” he added.

Yusuf noted that the recent escalation in petrol prices had further increased transportation and production costs, worsening competitiveness challenges for MSMEs.

“The recent escalation in petrol prices had increased transportation, logistics and production costs, weakening consumers’ purchasing power… The recent increase in fuel prices also worsened the competitiveness challenges confronting businesses, particularly micro, small and medium enterprises (MSMEs),” he stated.

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